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07-16-2020 VC B WS-MMINUTES OF THE BUDGET WORKSHOP SESSION VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA JULY 169 2020 Present: Susan Bickel, Mayor Mark Mullinix, Vice Mayor David B. Norris, President Pro Tem Darryl C. Aubrey, Councilmember Deborah Searcy, Councilmember Andrew D. Lukasik, Village Manager Leonard G. Rubin, P.A., Village Attorney Tammy Held, Deputy Village Clerk ROLL CALL Mayor Bickel called the meeting to order at 7:00 p.m. All members of Council were present. All members of staff were present, except Village Clerk Jessica Green. PURPOSE OF THE MEETING Mr. Lukasik provided an overview of the preliminary 2021 Budget. The following items were reviewed: • FY 2021 PRELIMINARY BUDGET SUMMARY • FY 2021 PERSONNEL COST ASSUMPTIONS & TOTAL POSITIONS • FY 2021 BUDGETED DEBT SERVICE & LOAN REPAYMENT SCHEDULE • FY 2021 COUNTRY CLUB HIGHLIGHTS • FY 2021 COUNTRY CLUB PRELIMINARY BUDGET SUMMARY, REVENUES & EXPENSES • FY 2021 GENERAL FUND HIGHLIGHTS • FY 2021 GENERAL FUND PRELIMINARY BUDGET SUMMARY, REVENUES & EXPENSES • FY 2021 — 2025 VEHICLE LEASE PROGRAM PAYMENTS • FY 2021 — 2025 CAPITAL IMPROVEMENT PLAN CASH FLOW SUMMARY • FY 2021 CAPITAL OUTLAY • FY 2021 TAXABLE VALUE & MILLAGE SELECTION FY 2021 PRELIMINARY BUDGET SUMMARY Mr. Lukasik gave an overview of changes that were made to the General Fund and Country Club budgets. He stated that the tennis and pool operations are now included within the Country Club budget. Mr. Lukasik also noted that the overall budget has increased by almost $1.2 million dollars, which was due to the growth in golf and expenditures in the General Fund, as well as some increases in revenues and expenditures in tennis. Including the pool and tennis transfer, the General Fund has decreased compared to the current fiscal year by 1 percent. The General Fund costs associated with personnel and CIP transfers has also increased. The Country Club budget has also increased by $1.4 million dollars compared to last year. Forty percent of the increase was due to pool and tennis. Personnel costs for the Country Club made up 34 percent of the budget. The number of full and part-time positions were also discussed as it related to the General Fund and Country Club budgets. Village Council Workshop Session held July 16, 2020 Category Millage Rate Personnel Operating Debt Service Capital Overlay CIP Transfer Contingency Transfer to Country Club Total Position Type Full -Time Part -Time General Fund Country Club Total $7.50 N/A $7.50 $17,083,228 $1,850,013 $18,933,241 6,186,569 3009429 9,246,998 1,640,000 433,689 2,073,689 10,000 99,500 1095500 510,000 0 510,000 13 5,200 0 13 5,220 274,000 0 274,000 $25,839,017 $5,443,631 $31,282,648 General Fund Country Club Total 142 10 152 49 55 104 FY 2021 PERSONNEL COST ASSUMPTIONS & TOTAL POSITIONS Page 2 of 5 Mr. Lukasik reviewed personnel cost assumptions and the total number of full and part-time positions. There were four categories, which were made up of Non -Union, PBA, IAFF and FPE employees. Mr. Lukasik discussed how salary range adjustments, merit increases and wage adjustments can affect budget costs. Employees within IAFF have the largest increase associated with personnel costs, contracts and health selections. Mr. Lukasik noted that there were no increases to the health insurance premiums. He also reviewed ICMA, Police and Fire, and General Employees pension contributions. Discussion took place regarding employee wages, salary adjustments and merit increases. Mr. Lukasik reviewed personnel costs by department. He also reviewed health insurance, benefits costs, and personnel changes by department. Description Non -Union PBA IAFF FPE 6% 3% Salary Range Adjustment N/A (10/l/20) (10/l/20) N/A 4% 3% 4% 4% Merit Increase (anniversary date) (anniversary date) (4/l/21) (4/l/21) 6% 3% $750 bonus Wage Adjustment N/A (anniversary date) (10/l/20) (10/l/20) Health Insurance No increase Workers' Compensation 10% increase Insurance ICMA Police & Fire General Employees Pension Pension Pension Contribution 15% 16% 12% Village Council Workshop Session held July 16, 2020 FY 2021 Full -Time 152 Part -Time 104 FY 2020 Change 153 -1 FT 102 +2 PT FY 2021 BUDGETED DEBT SERVICE AND LOAN REPAYMENT SCHEDULE Page 3 of 5 Mr. Lukasik reviewed the FY 2021 Budgeted Debt Service. Mr. Lukasik explained that the vehicle leases and the Clubhouse loan were within the General Fund. The initial golf course loan and 2018 golf course restoration were within the Enterprise Fund. The interest was totaled under Country Club expenditures and there is a total of $2,073.689 in debt service between the General Fund and Country Club budget. Discussion ensued regarding the clubhouse loan and payment schedule. Description Vehicle Lease Clubhouse Loan ($15m) Initial Golf Course Loan ($4,893,673) 2018 Golf Course Restoration ($1.7m) Total General Fund Country Club $348,000 1,292,000 FY 2021 COUNTRY CLUB HIGHLIGHTS $1,640,000 398,159 35,530 $433,689 Mr. Lukasik reviewed the FY 2021 Country Club Highlights, including: Total $348,000 1,292,000 398,159 35,530 $2,073,689 • The Country Club was recovering from the COVID shutdown. There was a $600,000 revenue loss combined in golf, tennis and pool, however there is optimism for the upcoming year. • Golf was performing well financially; exceeding last year's performance. • Tennis can close the funding gap. There was restructuring of the fee schedule and enhanced caliber of instruction, which will ensure lesson revenues offset tennis pro payroll. Also, more programming will be developed with a higher rate of return and plans to increase total membership to close the funding gap. • Pool was increasing revenue, but expenses have increased for proper maintenance. Programming for events on the deck, private party rentals and increased membership can enhance funding. • Restaurant financial performance was excellent pre-COVID; met the $2 million gross revenue threshold. Volume has decreased since reopening, which is consistent with most in the industry. There is hope of recovering. The budget assumes $100,000 in rent and reaching-$-5-million in -gross -sales ($150,000). • Golf operations continue to be the main revenue driver for the Clubhouse in both daily sales and membership dues. They are proposing a 3% membership dues increase this year, and an increase in walk-in rates up to $5/round based on day, time and season. • A full-time Assistant Golf Professional position will be added in order to provide adequate managerial coverage. • Golf Course maintenance increased by 15% to include funding for the bunker and pond improvements. Investment is needed in order to continue upgrading the course. • Tennis and Pool operations have been reintroduced into the Country Club Budget. There will be a transfer from the General Fund to the Country Club Budget to offset some of its costs. General Fund contribution is similar to years past with a goal to reduce the overall transfer requirement, which is slightly higher in the pool this year due to capital contribution. Costs have increased due to maintenance at the pool and costs for tennis pros. Village Council Workshop Session held July 16, 2020 Page 4 of 5 • Tennis and Pool personnel costs will increase by the addition of one part-time Head Tennis Professional and a Pool Supervisor converted to an Independent Contractor. FY 2021 COUNTRY CLUB PRELIMINARY BUDGET SUMMARY, REVENUES & EXPENSES Mr. Lukasik gave an overview of the FY 2021 Country Club Preliminary Budget Summary, Revenues and Expenses. He explained that pool and tennis operations were added into the budget and noted that total expenditures and revenues have increased, with a $1.1 million dollar increase in expenditures. Mr. Lukasik gave a breakdown of all revenues and expenses, explaining the main increases and decreases. Golf remains a main source of revenue for the Country Club. Discussion further ensued in regard to the Country Club budget. % Increase/ $ Increase/ Category FY 2021 Budget FY 2020 Budget Decrease Decrease Total Revenues $5,443,631 $3,983,588 36.65% $1,460,043 GENERAL FUND HIGHLIGHTS Mr. Lukasik reviewed the FY 2021 General Fund Highlights, including: • There has been a decline in several revenue categories due to COVID. • Major upcoming issues include Master Plan implementation, USI lane repurposing pilot program, redevelopment of code implementation, residential code update, bridge project planning, undergrounding overhead lines, and Anchorage Park dry storage. • Personnel costs are generally flat in terms of staffing with delaying new hires and filling open positions when possible. Health insurance has increased 0.3% or $6,900. There was a slight reduction in pension for Police & Fire due to State and employee contributions. • Vehicle leases consist of a rear load sanitation truck (purchase approved) and three police vehicles. The Village's policy on vehicle leasing will need to continue to be re-evaluated. • Clubhouse debt service. FY 2021 GENERAL FUND PRELIN41NARY BUDGET SUMMARY, REVENUES & EXPENSES Mr. Lukasik gave an overview of the FY 2021 General Fund Preliminary Budget Summary, Revenues and Expenses. He explained that ad -valorem taxes are anticipated to increase, however there was a decrease in other General Fund line -items and expenditures. Utility service taxes and ad -valorem taxes made up the majority of the revenue, followed by fines and forfeitures and charges for services. Mr. Lukasik gave a breakdown of all revenues and expenses, explaining the main budget increases and decreases by -department-. The--Public--Safety--and--Public---Works departments had the largest amount of expenses. % Increase/ $ Increase/ Category FY 2021 Budget FY 2020 Budget Decrease Decrease Total Revenues $25,839,017 $26,123,977 -1.09% ($284,960) FY 2021 - FY 2025 VEHICLE LEASE PROGRAM PAYMENTS Mr. Lukasik discussed the FY 2021 — FY 2025 Vehicle Lease Program Payments and reviewed how much is being spent per department. New vehicle leases this year consist of a rear load sanitation truck and three police vehicles. The total payment for FY 2021 is $347,639. This amount is recorded in the General Fund budget as debt service. Higher costs are anticipated in future years and will need to be evaluated. Village Council Workshop Session held July 16, 2020 Page 5 of 5 FY 2021 - FY 2025 CAPITAL IMPROVEMENT PLAN CASH FLOW SUMMARY Mr. Lukasik discussed the FY 2021 — FY 2025 Capital Improvement Plan Cash Flow Summary. Mr. Lukasik stated that the Council would receive a budget book with more detailed information within the next two weeks. The estimated ending balance for FY 2021 was $123,110, with higher balances projected in the future. The total amount estimated for capital improvement projects over the next few years is $11,210,240. FY 2021 CAPITAL OUTLAY Mr. Lukasik reviewed FY 2021 Capital Outlay and discussed all of the revenue categories, which were General Revenues, Country Club, Infrastructure Surtax, and Grant Funds. It is estimated that the FY 2020 balance would have no dollars left. It is estimated that there would be a balance of $720,000 in the FY 2021 Infrastructure Surtax Fund. Mr. Lukasik further discussed FY 2021 projects and costs. FY 2021 TAXABLE VALUE & MILLAGE SELECTION Mr. Lukasik reviewed the FY 2021 Taxable Value & Millage Selection. The proposed millage rate was 7.50 mils. This sets the maximum millage rate allowed for the Village. The Council may reduce this rate for the final adopted budget, but may not increase it. Mr. Lukasik explained there was an ad -valorem increase by 3.81 % over the FY 2021 roll -back rate. FY 2021 BUDGET HEARING AND WORKSHOP DATES Mr. Lulcasik outlined the budget workshop schedule. A public hearing to set the tentative millage rate was scheduled for July 23rd and a budget workshop was scheduled for August 15th. Public Hearings were scheduled for September 10th and 24th, with 2nd reading and final adoption of the FY 2021 budget and millage rate on September 24th. ADJOURNMENT With no further business to come before the Council, the meeting adjourned at 9:17 p.m. Tammy Held, Deputy Village Clerk